BARACK Obama has blamed opposition Republicans for the slow progress on reaching a deal that would prevent the US from going over a "fiscal cliff" and into an era of massive budget cuts and tax rises.

The US President last night said their "overriding theme" was to protect tax breaks for the rich, as a deadline for a compromise set by both leaders of the Senate slipped past without an agreement.

Politicians have until tomorrow to come up with a plan that would avoid automatic tax hikes and spending cuts. This would take $600 billion out of the economy, which could push the US into recession.

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Mr Obama said: "If people start seeing that on January 1 this problem still hasn't been solved – that we haven't seen the kind of deficit reduction that we could have, had the Republicans been willing to take the deal that I gave them – then obviously that's going to have an adverse reaction in the [financial] markets."

He added that he had offered Republicans significant compromises, which had been repeatedly rejected .

The stand-off goes back to a failed attempt to tackle the government debt limit and budget deficit in 2011.

Republicans and Democrats agreed then to postpone difficult decisions on spending until the end of 2012, and imposed a threat of compulsory cuts if no deal was reached by December 31.

Democrat Senate leader Harry Reid and his Republican counterpart Mitch McConnell spent much of a rare Sunday sitting yesterday trying to come up with a deal they could take to their parties, but remained at loggerheads last night.

Mr Reid said: "There are still serious differences between the two sides."

The sticking point appeared to be over cuts to social security retirement benefits and ways to narrow the US budget deficit.

Many Democrats, including Mr Reid, have insisted social security should not be touched.

John Boehner, the speaker of the House of Representatives, rejected the President's accusation that Republicans were protecting the rich.

He said: "Americans elected President Obama to lead, not cast blame. The President's comments today are ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party."

Meanwhile, the President has said he hopes to get new gun control measures passed during the first year of his second term.

Mr Obama assigned Vice- President Joe Biden to lead a taskforce to come up with proposals on guns by the end of January after the massacre of 20 children and six adults by a gunman at a primary school in Newtown, Connecticut, earlier this month.

The President said: "I'd like to get it done in the first year. I will put forward a very specific proposal based on the recommendations that Joe Biden's taskforce is putting together as we speak."